BY MAIRE O’NEILL
maire@losalamosreporter.com
Part 3 of a 3 part series
During Tuesday’s special Los Alamos County Council meeting, each of the seven councilors took the opportunity to speak at length about the proposed purchase by the County of the CB Fox and Reel Deal Theater buildings on Central Avenue. The meeting ended with a 5-2 vote against amending the purchase agreement, which was signed by Council in December, to extend the inspection by 30 days to April 21. Councilors Sara Scott and David Izraelevitz voted casted the dissenting votes.
A second motion to terminate the purchase agreement and direct the County Manager to provide written notice to the seller and escrow holder passed 5-2 with Councilors Scott and Izraelevitz voting against.
To see the first two stories on the meeting, which contain comments made by Scott and Izraelevitz during the meeting, go to:
COUNCILOR DAVID REAGOR
Councilor David Reagor thanked County staff for the presentation and County Manager Harry Burgess for “getting the ball rolling on this type of innovative thinking”.
“We have to look at a lot of different ideas and that doesn’t mean we accept something that does not really work its way out as a strong idea. As much of the public recognizes and as many of the leaders who called in tonight recognize, this project has some problems with it. We definitely want to do something but we want to do something that makes sense. I’m afraid what’s on hand right now is on the parking lot, well that doesn’t really matter. The deal is flawed on a lot of other levels, even if you could arrange something that satisfies state law and satisfies the County Attorney, it’s not a good deal for us. It’s not the right kind of approach, I think, to development,” Reagor said,
He said the County staff’s work shows that Council kind of has two options.
“You can lose a lot of money or lose a little bit of money. It really isn’t a plan to go forward to do something well and I think the developer who has the property now probably sees the same thing. You have a very small lot. It’s misshaped. It matches the outline of a building that is not conveniently shaped and he’s kind of in a tight spot,” Reagor said. “I think that even if you give him the height extension or some other zoning things, that doesn’t make it work because he runs into the parking issue. If he does the maximum rebuild, he still cannot turn a profit on that tiny misshapen lot.”
He said Council has to act in concert with developers.
“We can’t displace them. We do things in parallel in a supporting manner that helps not just that developer but all of the landowners around there in some positive manner that helps everybody. We cannot replace them because it’s just too hard to judge commercial value and what you can put in there,” Reagor said. “Sure, everybody wants a candy store or whatever they want. No! In fact the Anti-Donation Clause kind if creates a trap. Once you buy it you’re stuck in a certain position. You can’t turn around and sell it to your favorite person for $10 and a box of croissants or something. No, you paid a $1 million for it. That’s illegal, so you can’t just do that. You are stuck in this position of owning an expensive property.”
He said the only way out is “not to get into it” and to instead work with developers in a supportive fashion.
“You identify the key issues that are blocking a really good development that provides things for us, and gives the developer a chance to turn a profit on his own operation and that’s the kind of thing that we do. We act in concert with them. We act as a support. We act as a guy that puts in roads and whatever else we need to do – parking lots – and we change the code, the zoning, whatever we need to make a project go,” Reagor said. “That’s especially true in other parts of town where essentially big chunks look like a ghost town. That’s something we have to do everywhere in town and the idea that we’re going to replace them and do their job and that we have some wisdom that people who have been doing real estate development for years don’t have is a very silly kind of a pretense.”
He said Council needs to be asking developers what they need to move forward, not trying to thell then how it’s going to be done and asking them to but in.
“Holding the property because of anti-donation actually freezes us out of a lot of things we would actually like to do to help them along,” he said.
Reagor called the Reel Deal property a real treasure, saying the County should have a plan to make use of it using perhaps a citizen cinema cooperative to do something useful with it such as showing independent film and documentaries. He said the County could think of the theater as a library function and could host film festivals with the four screens. He said he has not, however, seen that kind of desire in the County and wondered who would be involved and how it would work.
“That (building) is a treasure and I think we should try to make use of it, but we should not get in the way of the developer and try to be the pretend-developer. And going on to the end of it, we don’t need to wait to resolve the parking issue because it’s a bad idea with or without the parking. I hope we vote down this motion and that we immediately go to Option B (terminating the purchase agreement) which maybe is automatically true if we defeat Option A (extending the due diligence period by 30 days). I think we’re at Option B,” he said
COUNCILOR SEAN WILLIAMS
Councilor Sean Williams said he was going to do something very unusual for him and actually read a prepared statement because the issue is “a little too technical for my adlibbing skills”.
“I support the goal of a vibrant downtown, but I’ve opposed this project from the start because it was clear to me, back in December, that the numbers wouldn’t work out. Anne Laurent, Patrick Sullivan, and I did independent analyses of this project, and all reached the same conclusion: any commercial space in the CB Fox building will cost potential buyers at least $325 per square foot. To put this into perspective, I looked up some commercial listings in Santa Fe. You could get 142 Palace Ave for $129 per square foot, 203 Water St for $273, or 149 Alameda St for $360. All of these are within a block or two of the Plaza. If you prefer vehicle traffic, you could get a former tattoo parlor on Cerrillos for $225,” he said.
He said those numbers raise a question for someone looking at making a major commercial investment.
“Would you rather spend $400,000 of your own money to be located in the heart of Santa Fe, or $500,000 for space in a commercial graveyard? That’s why this project will fail, be it tonight, next month, or next year,” Williams, a real estate agent, noted.
He agreed that the situation is frustrating and supporters of the proposed project should feel angry about it.
“But what we’re talking about tonight is the inevitable failure of a political project. Imagine instead that all your assets, your very livelihood, are caught up in this mess, and you’ll begin to see why the business community is so angry,” Williams said.
He said there are two things he hopes will come out of the discussions, first that his fellow councilors will better understand the business community’s perspective–why so many of them have no patience for organizations like Dekker Perich Sabatini, the County’s consultant for the downtown master planning and development code revision processes, and the Chamber of Commerce, which he said is “why all the big plans and visions fizzle out, and frankly, why the commercial sector is drying up”.
“You’ve gotten a taste for what we go through -second-hand, at arm’s length, but a taste nonetheless,” he said.
Williams said he hopes Council remembers the analyses of the proposed project when the Metropolitan Redevelopment Area for White Rock comes up in April.
“This project has proven that an infusion of public funds into the commercial real estate market will not improve the business climate and will likely just make it worse. Indeed, the goal of the MRA is to increase property values, but that’s the exact dynamic that makes this project such a bad idea,” he said.
Williams noted that he still supported buying the Reel Deal property as a civic project.
“I think enough people want a movie theater, and I think public subsidy is the only way we’ll get one. Anti-donation would apply to that as much as it applies to the Aquatic Center, or any of the other great civic services this county provides,” he said.
“Nonetheless, I think the respectful thing to do is to terminate this agreement, and enter negotiations with the seller for the Reel Deal alone. It’s my understanding that he offered the extension to provide time to sort out the parking lot, so I don’t think we should extend the contract for a different reason. If he’s interested in selling just the one property, then this contract can serve as a ready-made template for a new one, without us potentially coming across as ‘stringing him along,’ if he doesn’t want to sell us the Reel Deal,” Williams concluded. “Therefore, to nobody’s surprise, I will be opposing this motion.”
COUNCIL VICE CHAIR JAMES ROBINSON
Council Vice Chair James Robinson thanked staff for the presentation and thorough analysis on the project which were completed in record time. He also thanked developer Matt Miles for entering into the purchase agreement and bringing some popular new assets into the community like Anytime Fitness and Natural Grocers, Councilor Scott for her thorough commentary, and the public for their outreach through the public survey, emails and calls.
“Like everyone here, I’m all for a thriving downtown. I am jealous of the times I hear from my parents post the Zia Company, about what was available in Los Alamos and White Rock back in the early days. I am in total agreement with Miss Laurent about going out for every opportunity and evaluating whether or not it’s viable,” he said.
Robinson noted that he was supportive of the proposed purchase in the beginning for many reason up to and including the fact that a lot of times Council’s ideas fall flat because they have zero control over what the outcome will be.
“We like the plan of a grand vision but ultimately it’s up to those who own the buildings to facilitate that and thus far we’ve seen no progress on that front. They’re very happy keeping the buildings as they currently exist. And probably for the reasons that we’ve seen today – it’s just expensive rebuilding up here in Los Alamos,” he said.
Robinson went on to address the online Open Forum survey conducted by the County noting that there are some inherent issues with how the questions were formed.
“In the context of the tween center, there’s community support for it but in the context of CB Fox or the Reel Deal, the first question is, ‘Check all that apply” and one of them is a tween center. I read that as should we use that space as a tween center since that’s also what the supporting documentation had associated with it,” he said.
Beyond that, he said although there were some other issues with the Open Forum.
“But at the very end, it was clear that most people, both registered and unregistered, those willing to give us information and those not willing to give us information, were not in favor of this project as it sits. Maybe they were not in favor for one, maybe not for either, maybe not for both, but we don’t know because the Open Forum didn’t ask that question,” Robinson said. “That was feedback from the residents and I think we can’t just brush it off.”
He recalled that the Environmental Sustainability Board made a suggestion to the Council based on just 400 responses to the Open Forum that totally changed how waste collection is done in the County with with bi-weekly recycling and bi-weekly brush collection.
“Do I don’t think we can discount the 1,100 people who took the time to read through it and provide us comments, both thorough and very brief as some of the comments were. I do have concerns about this and they mainly focus on two areas. One was the feedback from the residents. The other one was the costs. I know it illustrates an issue with Los Alamos. We’re expensive to build. I’ve seen it first-hand. I’m trying to build across the bridge where you add in that those people probably need to be Q-cleared or at least under escort, so I know it’s expensive to build here. I was just kind of hoping it wasn’t that expensive to build here,” he said.
Robinson said the thinks the County could run into missed opportunities if it sinks a lot of money into this one project while also seeing that there are other needs.
“I know we have the money now, but I remember the discussion back with the recreation bond which was about $20 million for the rec center on top of the $13 million that the Council allocated. The citizens did not want to spend $20 million on a rec center and they voted it down. That said we did do the other rec projects. I’m concerned that the cost might endear us to these two facilities while we can’t address other issues in our community. It might even suck away dollars that we might be able to put into the MRA should any funding change at the Laboratory. I’m not saying the Laboratory is looking to lose funding any time soon but should that change, we might lose opportunities to do other strategic investments. And then there’s the ongoing question of the parking and I can understand that question can be answered in the next month or so,” he said.
Robinson said even though he knows the public wants Councilors to do something, they are currently very limited in what they can do.
“We’re adding tool to the toolbox. Strategic purchase might be one but … maybe CB Fox isn’t the strategic purchase we need to consider. Maybe it’s another building or series of buildings downtown we should consider that are easier to turn around at a point that a developer would be comfortable with and that we wouldn’t be saddled with a massive cost per square foot. I think one last point is, I really appreciate how this has unfolded. I think we have learned a lot from this process. It’s been a culmination of what a lot of us have been working on and I do recognize the opportunity, it’s just that as I’ve become more accustomed to it, read more about it, discussed it more, it’s just seems like it’s not the right opportunity,” he concluded.
COUNCILOR DENISE DERKACS
Derkacs said she agreed with a little bit of something that each of the Councilors said. She thanked the County staff for all their work in preparing the presentation and analysis.
“I also want to thank the public for all their input: the time they took to respond to the survey, send comments by email and so on. I want to thank Councilor Scott for addressing some of the issues raised in the survey. As I read through the responses, and I did read all of them, there is a lot of information out there in the public domain and I really appreciate Councilor Scott addressing them,” she said.
She noted that as others had said, the Open Forum survey was not a statistically valid survey.
“But it does show us a trend in how the County feels on the issues. There were obviously some duplicates – people responded more than once. The answers were identical so we have to factor that in. But overall, the survey tells us that roughly two-to- one, the people in the community don’t want us to support this,” Derkacs said.
She said she found the decision to be a very difficult one.
“In the almost 39 years I’ve lived here, I’ve watched business after business disappear. I think I can count on one hand the businesses that are still here from 39 years ago, so we have a definite problem. But I don’t think this is the right approach because, as Councilor Williams pointed out, the numbers just don’t pencil out. I think this will be a tremendous outpouring of County funds and I am very concerned that even after all the money we spend, we still won’t be able to provide retail space or even residential space that the public and our businesses can afford,” Derkacs said.
She noted that she liked the idea proposed by Patrick Sullivan of looking at more potential properties in Los Alamos and seeing if there are better options in the County to invest in.
“I do support the purchase of the properties for community use – that makes me a lot more comfortable than doing it for redevelopment for commercial use. In short, I’m going to say that I’m not going to support this project,” Derkacs said.
COUNCIL CHAIR RANDALL RYTI
Council Chair Randall Ryti was the last to voice his opinion. He said both Council and the public are very invested in the topic of the proposed purchase.
“I’m sorry that some people are very upset at the things we have done or think there are some things we could try to remedy. I’m sorry for people who are upset. Other people are very enthusiastic about the idea. I can tell my fellow councilors are really hoping this would work out. It was a big lift to ask everybody to look at this from last year to now,” he said. “It was a big job. I’ve done some analytical stuff but I think it’s not appropriate to look at that at this point.”
Ryti addressed comments in the Open Survey alleging that the County is not easy to work with.
“I think it’s important to know if that’s actually true. That’s more difficult to hear. That’s why I asked the question earlier about how much it costs to do work here in Los Alamos versus somewhere else. We got a kind of an answer – maybe 10 percent more – but that doesn’t sound like a place that people don’t want to do work in, it sounds like a place that’s a little more expensive,” Ryti said. “ Some of the reason is that workers have to travel all the way from Albuquerque to get to job sites up here in Los Alamos. I think that’s something for me to make sure the public realizes what the circumstances are here in the County in terms of the business environment. And definitely people do support certain things – people looked at supporting businesses or having more retail and restaurants downtown. “
He concluded by saying he appreciated that the project had a small footprint.
“But it also had some high costs for that footprint. For those reasons I’m not going to be supporting the 30 days either,” Ryti said.